S&P affirms U.S. sovereign debt ratings with stable outlook

S&P Global Ratings affirmed the U.S. sovereign credit rating at 'AA+/A-1+' on Friday, maintaining a stable outlook for the nation's debt. The rating agency cited the underlying resilience of the diversified domestic economy, which is expected to support solid revenue collection and stabilize fiscal deficits over the next several years.

Under the second Trump administration, economic policy continues to center on the signature tax and spending legislation passed in mid-2025. This initiative incorporates significant spending cuts alongside robust tariff income to help mitigate the risk of near-term fiscal slippage, according to S&P.

However, S&P expects net general government debt to surpass 100% of GDP by 2029 due to structurally rising interest costs and aging-related expenditures. While political polarization makes proactive bipartisan deficit reduction elusive, cross-party negotiations over the debt ceiling in 2027 are expected to be resolved in a timely fashion.

The sovereign ratings remain constrained by these long-term fiscal weaknesses but are heavily cushioned by the unparalleled flexibility of American monetary policy. Under Chair Kevin Warsh, the Federal Reserve is currently navigating above-target inflation while anchoring the U.S. dollar's status as the world's premier reserve currency.

Looking ahead, S&P forecasts real GDP growth to average roughly 2% through 2029, supported by sustained corporate investment in artificial intelligence. Ultimately, generally effective checks and balances across government institutions continue to underpin policy outcomes and preserve broader macroeconomic stability.